HRMID 10.1108/HRMID Human Resource Management International Digest 0967-0734 Emerald Group Publishing Limited 10.1108/HRMID-05-2015-0071 Articles News round-up HR & organizational behaviour Human resource policy Employee welfare News round-up 8 6 2015 8 6 2015 23 4 peer-reviewed no academic-content no EContentType JOURNAL rightslink excluded <bold>News round-up</bold>

Article Type: News round-up From: Human Resource Management International Digest, Volume 23, Issue 4

Link between pay and performance not straightforward

Reward specialists and HR could significantly increase employee motivation with a better understanding of the science behind the impact of pay and reward on employee behavior, according to research by the Chartered Institute for Personnel and Development (CIPD).

A report entitled “Show Me the Money! The Behavioral Science of Reward” discusses how money may not be the straightforward workplace motivator one expects. It highlights how alternative approaches to reward may be more effective in increasing employees’ intrinsic motivation to succeed.

By evolving the reward structure, organizations can take more control over the complex factors that determine their employees’ motivation and enhance their business success.

According to the report, employees’ perceptions of rewards are defined by the circumstances in which they are received. For example, a bonus received during tough economic times will be perceived as having much greater value than the same reward given in times of prosperity. On the other hand, a bonus may be perceived as having less value if the recipient considers his or her own performance to be stronger than that of other employees who receive the same amount as part of a team reward.

Given the tendency of people to overestimate their own abilities when performing familiar tasks such as those at work, reward and HR specialists need to be particularly wary of promoting a performance-based pay scheme to avoid disillusionment if employees’ rewards do not match their expectations.

Jonny Gifford, CIPD research adviser, commented: “These are interesting and challenging times for reward specialists. We need to recognize employees when they go the extra mile and add increased value, but there are a number of behavioral factors that should be considered when shaping a reward program.

“Crucially, we must acknowledge that monetary rewards are not everything and that they can even distort people’s motivation. For example, enticing the workforce with financial incentives and a strong bonus culture can lead to unwanted, risky and even unethical behaviors.

“Equally, because we tend to overestimate our ability as individuals, many if not most people find performance-based pay attractive in the first instance, but ultimately disappointing and demotivating.

“The key is having a flexible reward package that takes into account behavioral nuances and does not rely solely on a wad of cash as the only means to motivate staff. It is a change in direction for many but should also be welcome news for organizations that, in a challenging economic context, need to be more creative with their rewards package.”

The report suggests that alternative rewards can build intrinsic motivation among employees. It notes that recognition through appropriate symbolic awards – for example through employee-award schemes or discretionary ad hoc gifts from line managers – are consistent with a workforce whose desire to succeed is self-sustaining, rather than driven by a desire to earn more money. These rewards also have the benefit of being cost-effective and easy for businesses to disperse at ad hoc moments, rather than building up to a single moment of reward in any given year.

Time and timeliness are key aspects explored in the CIPD’s report. It references a study by psychology researcher Claire Zedelius and colleagues which found that when people were promised reward for a later task, they started to perform better at intermediate tasks, even when those were not subject to a reward.

The CIPD report also explores the difference in perception between instant gratification and rewards that are of equal value but deferred, such as pension contributions. This difference is starkest among the youngest workers, who place the least value on pension contributions and other benefits deferred to later life.

Charles Cotton, performance and reward adviser at the CIPD, commented: “Workplace pension schemes boost employee pay packets by thousands of pounds over the course of their employment but without the instant gratification of seeing that money land in their bank accounts each month, many employees fail to value the schemes.

“When it comes to reward, it is important that businesses regularly reinforce the total value of the package that they offer to individuals and pay equal attention to both short and long-term rewards. This can include communication and education, but should form part of a well-thought-out financial well-being strategy.”

With such a range of factors in play, the report concludes that the best reward strategies take into account both individual and group success, while not being overly complicated. By rewarding people for their individual performance as well as their contribution to a specific team or the overall company’s success, a business is most likely to see improved engagement, enhanced performance and good citizenship behaviors.

A third of organizations face recruitment difficulties

About a third of organizations are experiencing increased difficulty in recruiting and retaining employees, according to a Society for Human Resource Management (SHRM) survey.

Specifically, the percentage of organizations reporting difficulty recruiting and retaining employees at all levels increased in 2014 compared with 2013 and 2012.

In an effort to overcome these difficulties, organizations are using their benefits program to recruit new employees (29 per cent of organizations) and retain current employees (25 per cent).

Health care is the top benefit used by organizations to recruit (85 per cent) and retain (74 per cent) employees. This is followed by retirement planning, which is used by 72 per cent of organizations to recruit and by 62 per cent to retain employees.

“With the effects of the recession dwindling and competition for talent heating up, employers are looking to stand out in the crowd”, said Evren Esen, director of survey programs at SHRM. “A strategic use of benefits, especially health care, is one way to do that.”

More than half of the companies (56 per cent) struggle with attracting highly skilled employees. As a result, about one-third (32 per cent) emphasized benefits to recruit highly skilled employees. At the same time, only 9 per cent of HR specialists indicated that their employees are very knowledgeable about the employer-sponsored benefits available to them. And just over one-fifth (22 per cent) strongly agreed that their organization’s communication efforts are very effective in informing employees about their benefits.

Most organizations use online or paper enrolment materials (83 per cent) and group meetings with an organizational representative (70 per cent) to inform employees about benefits. Few organizations (4 per cent) use social media to share information about their benefits with employees.

“There is room for companies to improve their communication about benefits, so that employees are continually up-to-speed about the total rewards package”, said Evren Esen. “Communication is key because previous SHRM research has shown that the benefits package is an important contributor to employee job satisfaction.”

The SHRM surveyed 380 HR specialists from a random sample of its members throughout the USA.

A third of employees experience interpersonal conflict at work

More than one in three UK employees (38 per cent) have experienced some form of interpersonal conflict at work in the past year – including one in four (29 per cent) who have had isolated disputes or clashes and a further one in four (28 per cent) who report ongoing difficult relationships.

The CIPD, which commissioned the research, advises that mangers have a key role to play in diffusing tensions early on, as workplace conflict can have a major impact on employee well-being and business outcomes, with as many as one in ten employees leaving their organization as a result.

The report, “Getting Under the Skin of Workplace Conflict”, found that conflict shows itself in a number of ways at work, the most frequently cited being lack of respect, according to 61 per cent of the respondents.

One in every 25 respondents who had experienced conflict at work in the past year said that they had experienced the threat of or actual physical assault at work.

The CIPD urges employers to build a business culture that supports positive working relationships and channels, which means that any workplace conflict can be dealt with early before it escalates and becomes unmanageable.

When conflict does arise at work, it is most often perceived as being with line managers or other superiors (36 per cent) rather than with direct reports (10 per cent), highlighting the important influence of the power balance in how conflict is experienced. In other words, the junior person in the relationship is more likely to identify the issue as a problem, while the senior person either did not identify it as a problem in the first place or sees it as having been resolved.

The most common cause of conflict is a clash of personality or working style (44 per cent) rather than a conflict of interest. Individual performance competence and target-setting are also among the issues most likely to spark conflict, with promotions or contractual terms of employment being less influential.

The report found that there is a clear power differential at play, with employees being most likely to perceive a lack of respect, bullying or harassment from their boss or other superiors. One person in four said that their line manager actively creates conflict.

Jonny Gifford, research adviser at the CIPD, commented: “All too often, employers brush workplace conflict aside, putting it down to a difference of opinion. But it is clear that it has a serious impact on our working relationships, well-being and productivity.

“Line managers have a crucial role to play here. For the most part they are seen as a positive influence in helping to create strong, healthy team relationships, but there is still a clear case for developing managers and providing them with the skills they need.

“We need managers who can both build robust teams, where challenges can be made in a non-threatening way, and nip conflict in the bud before it has the chance to escalate. These are not generally seen as part of a core skill-set for line managers and that view needs to change.”

The report found that, in some instances, conflict has become unworkable, resulting in one in ten people leaving a role either by moving to another role in the organization, resigning or being dismissed.

There are other effects as well; an individual feeling stressed is the most common one, followed by a drop in commitment or motivation. One in seven cases (14 per cent) said that there had been a drop in productivity, and in 6 per cent of the cases, stress levels rose to a point where an individual went off work sick.

Jonny Gifford continued: “Both ongoing difficult relationships and isolated incidents at work can have major ramifications for employees’ personal well-being and morale and serious implications for the organizations through demotivation, absence and employee churn, not to mention the time it can take management and HR to resolve disputes.

“With one in 10 people leaving their role as a result of it and one in seven saying it affects their productivity, interpersonal conflict is something that no business can ignore.”

When it comes to dealing with conflict, the most common approach tends to be informal, with individuals discussing the matter with their manager, HR or personnel team or the other person involved. Employees also look to friends and family for support and advice – women are twice as likely as men to do this – but this does not seem to bear any relation to how well the conflict is resolved.

Only 1.5 per cent of employees who had experienced conflict at work used mediation as a tool to resolve interpersonal conflict, but 46 per cent of employees surveyed overall thought that it was an effective approach to dealing with workplace conflict, and more than one in ten (13 per cent) felt that they personally had had a relationship that would have benefited from mediation. This points to an unmet demand for alternative forms of dispute resolution.

Line managers have a key role to play in creating good working relationships at work and would benefit from particular training on managing and resolving conflict within the team as well as understanding how they need to protect their team in conflict situations resulting from external influences such as suppliers and the public.

While the survey supports the value of more informal approaches to resolving conflict, it also confirms the importance of having formal grievance and discipline procedures. However, in some cases, such as in conflict rooted in personality differences, they do not seem to help. Employers should therefore provide a range of options to help to resolve different types of conflict.

Over-50s look to prolong their working lives

Nearly two-thirds of over-50 workers would consider retraining so they could lengthen their working lives. Half would consider learning new skills to continue in full-or part-time employment, while 13 per cent would look to retrain so they could launch their own business.

A study reveals that around 71 per cent of all workers would consider working after current traditional retirement ages, with only one in three (31 per cent) expecting to retire completely from full-time work.

The decision to work past traditional retirement ages is not entirely financially driven, with 23 per cent of over-50s saying they enjoy working and do not feel ready to retire, while a further 30 per cent would miss the social interaction that work provides, and 29 per cent say they feel that work gives them a sense of purpose.

However, the study found that 55 per cent of working over-50s admit they are not financially well-prepared for retirement.

The change in working patterns was highlighted in an independent report, sponsored by MetLife, from Dr Ros Altmann, the government’s business champion for older workers. The report highlighted how the change in working patterns can dovetail with pension planning, flexible approaches, new products and more creative methods of funding retirement.

Dominic Grinstead, MetLife UK managing director, said: “It is striking that many over-50s are considering retraining to become more flexible at work just as pensions are being changed to be more flexible. The numbers contemplating working in retirement – whether it is full-time or part-time – shows that as the retirement landscape changes and people prefer to phase retirement, flexible-income solutions will be needed to enable people to make the best possible use of pension freedoms.

“Many savers will need certainty about future income and capital, so providers will have to develop solutions offering flexibility combined with increasing use of income or capital guarantees.”

The research was conducted among 2,531 employed adults aged 18 or over by market-research firm Consumer Intelligence.

Lawyers satisfied in their jobs

Lawyers have higher career satisfaction than the general UK workforce, although differences between experienced solicitors and those newer to the profession highlight a change in expectations around development and performance management, according to research by the Law Society.

Andrew Caplen, president, said: “It is encouraging that – as a whole – legal professionals are more content with their careers than average UK employees. It is welcome news that, despite many of the pressures facing the profession, a career in law remains a highly rewarding pursuit and a source of pride. However, we should not rest on our laurels. Those new to the profession have different career expectations from those who joined several decades ago.”

The key findings of the research are:

The majority of those working in the legal sector are satisfied with their careers. Over three-fifths (62 per cent) of respondents are satisfied or very satisfied in their role compared to 50 per cent in the general workforce, while three-quarters say they feel proud to work for their organization.

Employers face a growing battle to hang on to young legal talent because this group are open to switching between jobs and organizations more frequently. In the survey, 35 per cent of 25-34-year-olds say they are likely to change jobs in the next 12 months, compared to 26 per cent of the overall sample, and the highest of any group.

Respondents who are less involved in making strategic decisions about the future of the business are more likely to leave their role in the year ahead. Just 15 per cent of respondents who are fully engaged in their organization’s strategic direction say they are likely to change jobs in the next 12 months; yet, 28 per cent of those who are not engaged at all say the same.

There is a need for employers to do more for their staff in terms of providing constructive feedback and clarifying goals. Almost one-third (30 per cent) of survey respondents say they do not receive regular and constructive feedback on their performance. With just under half (48 per cent) of employees confident they are getting the feedback they need to develop effectively, a large proportion is looking elsewhere for the mentoring that will help them to progress in their career.

Mark Griffin, head of Law Society Consulting, said: “Employee involvement in decision-making is a foundation of a successful company. It opens up lines of communication between top management and staff, helps staff better to understand internal processes, encourages employees to act as internal consultants and ultimately increases their contribution to the success of an organization. Organizations that do not embrace this are at risk of losing staff.”

Andrew Caplen concluded: “To retain the best talent, it is important that firms make sure they have a sound performance-management process, where staff have regular opportunities for two-way feedback and there is a chance to work together on development plans to help to achieve their goals.”

A third of parents work on family holidays

More than a third of parents (36 per cent) admit that their quality family time is likely to be invaded by work.

A survey of 1,000 UK families reveals that 12 per cent of working parents expect to carry out at least four hours of unpaid work when away on holiday with their families. Some 32 per cent admitted that they would take work calls while on holiday, while 36 per cent planned to check and respond to e-mails.

Just under a quarter said that their children and/or partner regularly complained about them carrying out work while they are supposed to be off-duty.

Mobile telephones are the main cause of disruption, with the vast majority (86 per cent) of holiday working being carried out using the devices.

Sue Ratcliffe, of call-answering service alldayPA, which commissioned the research, said: “Smart-phones are an incredibly useful tool, but they blur the boundaries of work and home. Recent studies indicate that as a nation we are becoming more and more addicted to our smart-phones and perhaps need to make a conscious effort to put them to one side, especially during holidays with our families.”

Research by the University of Derby found that smart-phones were psychologically addictive, with the average smart-phone user spending 3.6 hours a day on their device. Participants admitted the excessive use of mobile devices caused distraction from their jobs and hobbies, with 35 per cent of those surveyed admitting to using their devices in situations where they were banned.